Mexico Political Consensus Grows on Easing Foreign Stake Limits

Oct. 3 (Bloomberg) -- Mexico’s incoming and outgoing
presidential administrations are finding common ground on the
need to ease foreign investment caps, including a 49 percent
limit on holdings of land-line phone companies.

President-elect Enrique Pena Nieto may support a bill by
Felipe Calderon’s administration to lift foreign direct
investment limits in some sectors, Ildefonso Guajardo, a top
Pena Nieto economic adviser, said in an interview in Mexico City
today.

If the bill “boosts competition and doesn’t endanger
national security frameworks or strict sovereignty, it probably
has possibilities,” Guajardo said, in his first interview with
foreign press since the July 1 election. “You have to re-evaluate where these restrictions still make sense,” and caps
in the land-line sector “probably won’t pass the test.”

Outgoing President Felipe Calderon’s government will send
the bill to Congress in the next couple of weeks, Deputy Economy
Minister Jose Antonio Torre said today in an interview.
Officials are still determining which industries the bill will
address, Torre said, adding that transportation,
telecommunications and financial services are “restricted.”

“If we don’t open the energy sector, the telecom sector,
Mexico is going to be stuck around the same level of FDI we’re
getting: $20 billion, $22 billion, $23 billion,” Torre said.
“If we can do some of the deep reforms Mexico needs and raise
some of these restrictions, I think we could double, easily, the
amount of FDI we’re getting.”

Pena Nieto of the Institutional Revolutionary Party takes
office Dec. 1, ending 12 years of rule by Calderon’s National
Action Party.

Peso Move

The Mexican peso rose 0.2 percent to 12.8290 per dollar at
3:21 p.m. in Mexico City. It touched an intraday high of 12.8214
per dollar following Torre’s comments.

Mexico’s antitrust and telecommunications regulators have
both called for the elimination of the 49 percent limit on
foreign ownership of land-line telecommunications companies to
encourage competition. The current law also includes a 25
percent cap on domestic airline stakes and says broadcasting
services must be exclusively under Mexican control.

Pena Nieto “will promote competition in a decisive way in
all sectors,” Guajardo said in Mexico City. The conditions have
changed since the investment caps were put in place 20 years
ago, including among phone companies, he said.

“Twenty years ago many of these groups were just starting
up and growing. Today they are very strong corporations,”
Guajardo said.